Advise on getting cash frmo HML on a rental we own free and clear
Talking with a Hard Money Lender (HML) about options with getting funds out of my rental property with a rough valuation of $250K after updates and adding a 3rd bathroom (4/3) and hardwoods, LED lighting, Granite Island, etc. Paid $211,200 a year ago and own the home free and clear (no mortgage or leans).
HML: 11% - 18% (locked for 5 years then adjustable). No closing costs. Up to 3% penalty if closed the loan out in less than 3 years.
My questions...
- Is this a good strategy to get funds for flipping and what would be the best way to use the funds if my credit isn't perfect (over 700 though)? I'd like to flip 2 to 4 houses this year depending on how long the buy, flip and sell process is. We were turned down by a bank to get a HELOC on our personal residence that we also own free and clear.
- Would it be better to try and get a mortgage on the property (knowing I will have to play closing costs) but get a lower interest rate?
- Is this a good HML proposition?